What is CapitalPitch?

CapitalPitch is a platform designed to accelerate startup investment. We do this by:

  1. Helping startups get investor-ready via our 6 step process
  2. Simply and efficiently connecting them with investors via our equity funding platform
  3. Co-investing as a lead in all the startups via our Venture Capital Fund

As a result startups raise capital more quickly and effectively, and investors are only presented with amazing curated deals in a format they are looking for.

Who is behind CapitalPitch?

CapitalPitch was founded by serial founders Emlyn Scott and Jeremy Liddle, who both experienced the frustration of capital raising first hand.

CapitalPitch is now backed by an elite group of investors who believe in CapitalPitch and the united desire to solve the capital raising problem for early stage businesses and investors.

Is CapitalPitch a crowdfunding platform?

Yes and no. CapitalPitch is a sophisticated/accredited only equity-based crowdfunding platform. It is only open to sophisticated/accredited investors, not the “crowd” which refers mainly to “retail” investors.

In addition to being a world leading crowdfunding platform, CapitalPitch also has a unique 6 step investor-ready process for helping, curating and conducting due diligence on startups so only the best make it to our platform to be showcased to investors.

CapitalPitch, via our Venture Fund, will also co-invest into every startup that successfully completes our process.

Is CapitalPitch regulated by ASIC?

CapitalPitch is a business introduction platform for wholesale, sophisticated and professional investors to directly invest in private equity in startup and early stage businesses.
CapitalPitch operates its platform pursuant to the prescriptive requirements of ASIC Class Order 02/273 (Business Introduction or Matching Services), RG 129 and section 708 of the Corporations Act (Cth) 2001. CapitalPitch nor our platform is endorsed or approved by ASIC. You can read our Disclaimer here.

What fees do you charge?

There is no fee to list a business on CapitalPitch.

CapitalPitch charges businesses 3% of the capital raised on successful raises. We charge a marketing fee of 4% which is paid to whomever introduces the capital. So if the startup finds their own investor they only pay 3%. However, if another party such as a corporate advisor,angel association or even another investor introduces the investor then the business pays CapitalPitch 3% and the introducer receives 4%. If CapitalPitch sources the capital we receive 7% (3% + 4%).

Investors are not charged anything.

Unsuccessful raises are not charged.

Does CapitalPitch invest in the startups as well?

Yes. We invest in every startup that successfully raises. We invest via the CapitalPitch Ventures Fund as the co-lead. We currently invest $50,000 or 10% of the raise, which ever is lower.

We believe that our 6 step process produces superior startups and we want to invest alongside other investors. This ensures that we are 100% aligned with investors as our returns are dependent on the successful future of each startup.

Is my data private?

CapitalPitch will not share your information with third parties other than to finalise transactions and ensure our website operates efficiently. We do not sell user data to advertisers for marketing or any other purposes.

Can I speak to someone at CapitalPitch?

Of course. There are several ways you can communicate with us. However, please do check out the FAQ sections as we find that most of the questions we get asked you can find the answers quickly here, and it also we can progress to more detailed questions more quickly. The best ways to connect with us are:

 

 

Why do you have a 6 step process?

We have designed the 6 step process to efficiently and effectively curate a startup from the moment they are thinking of raising capital right through to closing their round. The 6 steps entail a complete start-to-finish capital raising process.

Startups all too often are simply not investor-ready and investors are inundated with deals and the vast majority are subpar. The average VC will only invest in 0.5% of the deals they see and angels around 2.5%. Startups need to stand out and present themselves properly. Investors want to see better deal flow. We created the 6 step process to solve these problems.

What is an equity pitch?

There are many types of “pitches” on crowdfunding platforms, such as rewards, debt, convertible notes and revenue share. An equity pitch is when a business raises capital in return for releasing equity shares in their business.

CapitalPitch is a platform where businesses offer equity in return for capital investment from sophisticated/accredited investors.

Who can start a pitch?

Any startup that is Seed or above (Series A, B etc) can look to CapitalPitch to get investor-ready and receive investment from investors and from the CapitalPitch Venture Fund.

All startups that are presented to general investors on the platform must have successfully completed CapitalPitch’s 6 step process, including passing the Venture Fund Investment Committee.

You can quickly see if we can help by taking our eValuation questionnaire, which will provide you with a report containing your investor-attractiveness score, indicative valuation and helpful advice.

How does CapitalPitch work?

CapitalPitch is a powerful fundraising platform that enables startups from Seed stage and above to quickly engage a large network of sophisticated/accredited investors to raise capital.

Startups follow the 6 step process which is a start-to-finish capital raising process. The steps are:

  1. eValuation – this quick questionnaire produces an investor attractiveness report categorising your investment stage, attractiveness score, indicative valuation and helpful advice
  2. Pitch Deck – 21 slide deck covering all the important elements of your business
  3. Commercials – financials and sales & marketing plan
  4. Data Room – 70 point data room and legals
  5. Lead Investor – experienced lead investor to agree price and terms as well as CapitalPitch Ventures co-leading investment
  6. Raise – follow on sophisticated/accredited investors complete your round on our equity finding platform

 

How does CapitalPitch assess and approve my pitch?

CapitalPitch is looking for high growth businesses that are Seed level and above that we think investors will want to support. Our 6 Step process is not only designed to help startups get investor-ready, but also remove startups that we think investors will ultimately not be interested in.

Startups must:

  • meet our basic qualifying criteria which is assessed via our eValuation
  • produce a score above 70 on their Pitch Deck
  • produce a score above 70 on their financials and sales & marketing plan
  • produce a score above 70 on their data room
  • pass our due diligence checklist
  • pass the CapitalPitch Ventures Investment Committee
  • secure a lead investor

Only the best of the best make it. That’s why investors trust our deal flow.

What type of startups are you looking for?

In general, CapitalPitch is looking for high growth businesses looking to raise between $250,000 and $10m, that investors will want to invest in.

More specifically, startups with the following characteristics are our ideal customer:

  • Seed level and above – i.e. you are live and making at least $5,000 a month in revenue
  • 10%+ month on month revenue growth
  • 2 founders
  • experienced team
  • coachable
  • realistic valuation
  • highly scalable
  • strong IP
  • well defined exit strategy

What type of investors are on CapitalPitch?

CapitalPitch’s equity crowdfunding platform is restricted to sophisticated/accredited investors only. Retail investors are not permitted to use the platform.

We categorise investors into:

  • Individual Investors – Angels, Advisors, others
  • Organisations – Angel groups, Corporation, Family Offices, Financial Institutions, VCs, Private Equity, Corporate Advisors, others

How long does the process take?

The time it takes to complete your investor-readiness depends on your initial readiness level, your experience and your desire to complete everything. Focused startups can complete the investor readiness parts (Steps 1 to 4) in as little as 3 weeks. Most startups unfortunately realise they have a lot of work to do to be truly investor ready and take longer.

For high potential startups we will look to accelerate your progress via a 3 day bootcamp with our expert coaches.

Once a pitch is on our platform it has up to 90 days to reach its target, though some complete their raise much faster than that.

What is a Lead Investor?

A lead investor is an investor who is:

  • recognised as an experienced investor and/or experienced in the startup’s field
  • first in the round
  • takes approximately 20% of the round
  • sets the price and terms
  • puts his “name” to your raise
  • introduces their network to your raise

We require every startup to have a co-lead (Step 5) before their pitch is made public on the platform. Lead investors get to see each pitch before they’re made available to all investors on the equity platform.

CapitalPitch Ventures will also co-lead every deal.

What is a private Deal Room?

Any investor on CapitalPitch can create their own private Deal Room that only investors in their “network” can view and invest. Deal room owners can invite and approve investors wishing to access their deal room. Pitches may be listed in a private deal room so investors associated with the deal room have exclusive access.

What is an “all or nothing” raise model?

There are two main funding models in the crowdfunding market, “all or nothing” and “keep what you raise”. Both a pretty self-explanatory.

CapitalPitch operates an all or nothing model. The startup sets a target raise amount, say $1m, that they want to raise and they have to hit that amount to close the round. If you don’t reach your target the funds are not collected or are returned if they have already been deposited.

When a CapitalPitch expires it either expires “Funded” having reached its target, or expires “Unfunded” having not reached its target.

 

When can I show investors my pitch?

Startups can start showing their pitch to investors the moment they register on our platform and start to build their pitch. Each pitch has a unique URL which you can share with investors, colleagues etc. Your pitch is unpublished at this early stage so only those that you give your URL to will find your pitch. They can Follow and Request Access to your pitch deal information, but cannot Register Interest with an offer in your pitch.

Once your pitch is “approved” by CapitalPitch it’ll be showcased publicly on our platform and all our investors will be able to find, look at and Register Interest your pitch.

How much capital can I raise on CapitalPitch?

Currently the minimum amount you can raise is $250,000 and the maximum is $5 million. If you would like to raise above this level please come and talk with us.

Can I raise more than the minimum target?

Yes absolutely. This is called overfunding. You can continue to accept investments until you reach your cap or your time expires.

How long do I have to raise my target?

The CapitalPitch platform is flexible and you can set your capital raise campaign time from 30 to 90 days.

What happens once my target is reached?

Once your target amount is reached you have the option to close your raise or continue and overfund it.

Even though a raise may have hit its target on the platform it does not mean that those funds are committed. They are only reserved amounts and commitments still have to be met between the startup, investors and the intermediary lawyers. Investment documents need to be agreed and signed. This means that certain reserved amount may not convert into a committed investment, and will have to be removed from the reserved amount on the platform.

Do investors have to join CapitalPitch to partake in the raise?

No. We want the pitch recorded on CapitalPitch to be the hub of your capital raise, so we record your investor interest lodged on the platform AND you can record external (direct) investor interest manually onto the platform.

Of course we’d prefer that all investors in a round register on the platform and record their interest that way, but that is not necessary. Within the pitch admin section the startup can record and control external investor interest in the raise.

Can I raise from investors outside Australia?

Yes. While CapitalPitch is restricted to sophisticated/accredited investors only, this is not country specific. Each country has a different set of requirements that determines the status as a sophisticated/accredited investor. Their country of residence (the one in which they pay taxes) determines their investor eligibility.

For example, in Australia Section 708 of the Corporations Act defines a sophisticated investor as having annual income of $250,000 for the last two years or a net worth of at least $2,500,000 in order to invest in early stage companies. For US residents it’s $200,000 and $1 million (not including your primary residence).

When an investor joins CapitalPitch they will be asked to self-certify that they meet the sophisticated/accredited status of their country of residence. This will however only allow them to use the CapitalPitch platform. When they actually invest they will be required to more fully prove their eligibility via the deal lawyers.

Can I update my pitch after launch?

You can edit and update certain parts of your pitch such as your traction, executive summary and data room. In fact, we actively encourage you to keep your traction (milestones, press and key customers) regularly updated. Other more sensitive data like your raise and countdown clock can only be edited by CapitalPitch.

Can non-Australian startups raise on CapitalPitch?

Yes. We are an international platform and welcome startups from all around the world. You should consult your lawyers prior to using CapitalPitch to ensure your local laws don’t cause you any issues.

Do transactions and investments actually occur on CapitalPitch?

No. CapitalPitch is a marketing and advertising platform that showcases startup pitches to a growing pool of sophisticated/accredited and professional investors.

The actual transaction of wiring investment money does not occur on CapitalPitch. This occurs offline directly between the investor and the startup, with the help of the lawyers.

What happens if a pitch fails to reach its target?

If your target amount is not reached within the time limit your pitch will be considered expired “unfunded” as we operate an “all or nothing” model. However, CapitalPitch can extend your raise time if you are close to your target and your investors are happy to continue. Alternatively, with the agreement of the investors you have received you could close your round having not reached your target. That is at the discretion and agreement of you and your investors.

Will CapitalPitch sign an NDA with me?

Anything you share with us is treated with complete confidentiality. However, we will not sign an NDA for several reasons:

  • Our business is to show you off in an open and transparent manner
  • It wastes our time and money with lawyers
  • We are busy building CapitalPitch and have no interest in doing your business
  • It reflects a distrustful relationship between you and us which is not how we like to operate

If you can’t get past the requirement for an NDA then CapitalPitch unfortunately is not for you, and we wish you well in your capital raising.

How are the deal terms negotiated?

CapitalPitch has produced best-of-breed fair legal documentation that we recommend startups use. The lead investors will then negotiate and agree the deal terms with you including valuation and follow on investors will accept (or not) these terms.

Does CapitalPitch offer marketing support?

We provide education, strategy and resources to startups to help them with their investor marketing. We also market you to our direct investor database, to our large social media following and via the media in general.

However, while we like to open investor doors for you and spread the word, the responsibility for marketing you raise remains with you and we don’t provide hands on support.

Which investors can use CapitalPitch?

CapitalPitch’s equity funding platform is restricted to sophisticated/accredited investors only. Investors from all over the world can invest though each country has a different set of requirements that determines the status as a sophisticated/accredited investor. Your country of residence (the one in which you pay taxes) determines your investor eligibility.

Retail investors are not permitted to use the platform. Investors must be 18 years or over.

All types of investors are welcome on the CapitalPitch platform:

  •   Individual Investors – Angels, Advisors, others
  •  Organisations – Angel groups, Corporation, Family Offices, Financial Institutions, VCs, Private Equity, Corporate Advisors, others

Is CapitalPitch free for investors?

Yes. It is free for investors to register and use CapitalPitch.

Also as you own stock directly rather than through a managed fund, there are no annual management fees or future carry fees to worry about.

What are the risks of investing in a startup?

Investing in early stage securities is high risk. Investors wishing to invest in this asset class should take the time to understand the risks and have a strategy in place for mitigating those risks. We encourage all investors to have a diversified portfolio. Before using CapitalPitch, please ensure you read and understand our Disclaimer.

Do I own shares in the business directly or via a fund?

If you invest in a startup on CapitalPitch you will become a direct shareholder in the business. The percentage you acquire is determined by the amount you invest and the price being offered by the startup. Once you have agreed to invest you will sign legal documents and be issued shares in the business and appear on the share register.

If you purchase convertible notes you will not become an immediate shareholder, but rather a debt holder until your debt is converted to equity at a future trigger event.

If you invest via the CapitalPitch Venture Fund you will not own shares in the startup directly but via the Fund which owns the shares, together with other Fund investors, on your behalf.

Why should I invest in startups?

We wrote a blog post that describes 8 reasons why you should consider investing in startups.

You can read it here: What are the 8 reasons you should consider startup investing. It covers the following eight reasons:

  1. High average returns
  2. Potential for outsized returns
  3. Improved portfolio performance via diversification
  4. Tax breaks
  5. Legal insider information
  6. Affect life changing solutions
  7. Job creation
  8. Be involved

Can I see a pitch before it is “Live”?

Once a pitch goes “live” on the platform, it is made public and is available for all investors to see. 

Before the pitch is live, startups can still provide access to selected investors using the unique URL that is generated when a Pitch Deck is created.  Investors can gain access to the pitch deal information at this stage, but will only be able to Register Interest in the offer once the pitch is approved by CapitalPitch and made live on the platform.

Once a pitch goes “live”, it is showcased on the platform and available for all investors to find, request access to the data room and register interest in investing.

Do investors have to join CapitalPitch to invest in the startup?

No. We want the pitch recorded on CapitalPitch to be the hub of a startup’s capital raise, so we record investor interest lodged on the platform AND a startup can record external (direct) investor interest manually onto the platform.

Of course we’d prefer that all investors in a round register on the platform and record their interest that way as it’s more transparent, but that’s not necessary. Within the pitch admin section the startup can record and control external investor interest in the raise.

Does my profile have to public?

An investor’s profile can be Public or Private.

A Public profile is:

  • visible throughout the platform to other investors and startups
  • able to be followed by other investors
  • able to follow other investors and startups

A Private profile is:

  • Hidden throughout the platform to other investors and startups
  • not able to be followed by other investors
  • not able to follow other investors and startups
  • visible to a startup when the investor Requests Access to a pitch’s details

Can I speak directly to the startup?

Yes of course. We want you to communicate with the startups. We have provided the “Questions” section of the Pitch so you can communicate with a startup. You can ask private or public questions.

You can see the questions area without Requesting Access. However, you need to Request Access first to be able to ask a question of a startup.

Does self-certification on CapitalPitch mean I have proven my sophisticated status?

Only investors that have self-certified can access the deals on CapitalPitch. When you first register, you’re required to self-certify as a sophisticated/accredited investor or professional. You can also verify your status in the Settings section.

However, self-certification does not mean you have fully proven you are a sophisticated/accredited investor. If you invest in a startup you will be required to confirm your status with the intermediary lawyers.

Is CapitalPitch’s 6 step process a type of due diligence process?

Yes, CapitalPitch’s 6 step process is a type of due diligence process. But it’s also so much more than just due diligence.

While we conduct a thorough top to bottom review of a startup via our process, it is also designed to help startups get investor-ready and remove startups that we think will not offer investors the very best investment opportunities.

 

What happens when I “follow” a startup?

Once you’re following a pitch you will show up on their Followers page and you can see the company in your Following tab in your Profile under the “Companies” section. You will also receive notifications on the startup’s progress and status.

What is an “all or nothing” raise model?

There are two main funding models in the crowdfunding market, “all or nothing” and “keep what you raise”. Both a pretty self-explanatory.

CapitalPitch operates an all or nothing model. The startup sets a target raise amount, say $1m, that they want to raise and they have to hit that amount to close the round. If you don’t reach your target the funds are not collected or are returned if they have already been deposited.

When a CapitalPitch expires it either expires “Funded” having reached its target, or expires “Unfunded” having not reached its target.

What sort of businesses are listed on CapitalPitch?

In general, CapitalPitch is looking for high growth businesses looking to raise between $250,000 and $10m, that investors will want to invest in.

More specifically, startups with the following characteristics are our ideal customer:

  •       Seed level and above – i.e. business is live and making at least $5,000 a month in revenue
  •       10%+ month on month revenue growth
  •       2+ founders
  •       Experienced team
  •       Coachable
  •       Realistic valuation
  •       Highly scalable
  •       Strong, defendable IP
  •       Well defined exit strategy

What is overfunding?

When a startup reaches its minimum funding target it can choose to continue to accept investments above this target level. This is called overfunding.

The startup can continue to accept investments until they reach their cap or their time expires. However startups are not required to continue to accept more investment once their target is reached.

 

How long does a business have to raise its target?

The CapitalPitch platform is flexible and the startup can set a capital raise campaign time from 30 to 90 days.

Does overfunding affect the equity being offered?

Yes. When a startup accepts additional funds above their target via overfunding, the additional equity will increase the overall shares on issue and decrease your percentage of the business by the additional amount raised.

 

Does CapitalPitch do due diligence on startups listed on the platform?

Yes, CapitalPitch’s 6 step process is a type of due diligence process. But it’s also so much more than just due diligence.

While we conduct a thorough top to bottom review of a startup via our process, it is also designed to help startups get investor-ready and remove startups that we think will not offer investors the very best investment opportunities.

 

Our Venture Fund Investment Committee also thoroughly reviews each startup before they are accepted. The other co-lead will also likely perform their own due diligence on the startup before committing to invest.

Is there a minimum or maximum amount I can invest?

There is a minimum amount set by the startup on each pitch, which you can see on their pitch financials. This is no maximum limit.

However, even though their is no upper limit we recommend you allocate your startup investment funds across a broad range of startups for diversification to reduce your risk.

Can I invest in the CapitalPitch fund that invests in every qualifying startup?

Yes. The CapitalPitch Fund was created invest as the co-lead into every startup that successfully completes their raise on CapitalPitch. It offers an excellent way for investors who are time poor, inexperienced at startup investing and/or want a way to invest in startups in a diversified manner.

What are the advantages of the CapitalPitch fund?

The CapitalPitch fund offers investors a way to access CapitalPitch’s deal flow in a simple, effective and diversified manner.

The CapitalPitch 6 step process is designed to identify superior startups and help them get investor ready. We believe that the startups that successfully complete our process and obtain funds represent excellent investment opportunities.

The CapitalPitch fund currently invests either $50,000 or 10% of the raise, whichever is smaller. The fund invests as the co-lead into every startup that successfully completes their raise, creating a well diversified portfolio of excellent startups.

What are networks and deal rooms?

Any investor on CapitalPitch can create their own private Deal Room that only investors in their “network” can view and invest. Deal room owners can invite and approve investors wishing to access their deal room. Pitches may be listed in a private deal room so investors associated with the deal room have exclusive access.

What is a lead investor and can I be one?

A lead investor is an investor who is:

  •       recognised as an experienced investor and/or experienced in the startup’s field
  •       first in the round
  •       takes approximately 20% of the round
  •       sets the price and terms
  •       puts his/her “name” to the raise
  •       introduces their network to the raise

We require every startup to have a co-lead (Step 5) before their pitch is made public to non-lead (follow-on) investors on the platform. Lead investors get to see each pitch before they’re made available to all investors on the equity platform.

If you would like to apply as a lead investor you can do so via your Profile page.

CapitalPitch Ventures will also co-lead every deal.

Does CapitalPitch collect investor commitments on behalf of the startup?

No. CapitalPitch is a platform that accelerates startup investment by marketing startups to a growing pool of sophisticated/accredited and professional investors.

The actual transaction of wiring investment money does not occur on CapitalPitch. This occurs offline directly between the investor and the startup, with the help of the lawyers.

What happens when I “Request Access” to a pitch?

The Request Access button signifies to a startup that you are curious and would like to learn more.

When you click Request Access on a startups pitch page, the startup is notified that you’d like access to their executive summary page, investment details and data room. Startups can view your profile and decide whether to grant you access or not.

The more complete your profile the more likely a startup is to grant you access.

If I indicate interest in a pitch by the “Register Interest” button am I committed?

No, you are not committed. Registering Interest notifies the startup that you are seriously interested in investing and that it’s time to talk and sign term sheets.

Committing to invest occurs outside the platform bilaterally between the investor and the startup, with the help of the intermediary lawyers.

What happens when the target amount is reached?

When the target amount is reached the startup has the option to close their raise or continue and overfund it.

Even though a raise may have hit its target on the platform it does not mean that those funds are committed. They are only reserved amounts and commitments still have to be met between the startup, investors and the intermediary lawyers. Investment documents need to be agreed and signed. This means that certain reserved amount may not convert into a committed investment, and will have to be removed from the reserved amount on the platform.

Can I cancel my investment?

Your reservation via the Register Interest button is non-binding and an indication to the startup that you are seriously considering investing. It is more of a show of interest. The commitment comes later when you sign term sheets. At that time you will also formally prove your sophisticated/accredited status.

Will CapitalPitch publish my investment amount?

No. We never disclose how much money you have invested in a pitch. We display investors who have invested in a startup on the pitch if they have a public profile. We also display a list of the pitches you have invested in on your profile.

We show you how much you have invested in your dashboard, but this is private to each investor.

Can I become a Board member or adviser to the startup I invest in?

Yes, but that is entirely up to you and the startup. One of the reasons we restrict CapitalPitch to sophisticated/accredited investors and professionals is because of the value they can bring beyond just money.

Can I use my own lawyers?

CapitalPitch has intermediary lawyers that produce fair documentation for the startups and investors. They handle the settlement process. However, you are of course free to consult your own lawyers at your own expense.

Can foreign investors use CapitalPitch?

Yes. While CapitalPitch is restricted to sophisticated/accredited investors only, each country has a different set of requirements that determines the status as a sophisticated/accredited investor. Your country of residence (the one in which you pay taxes) determines your investor eligibility.

For example, in Australia Section 708 of the Corporations Act defines a sophisticated investor as having annual income of $250,000 for the last two years or a net worth of at least $2,500,000 in order to invest in early stage companies. For US residents, it’s $200,000 and $1 million (not including your primary residence).

When you join CapitalPitch as an investor, you will be asked to self-certify that you meet the sophisticated/accredited status of your country of residence. This will however only allow you to use the CapitalPitch platform. When you actually invest, you will be required to more fully prove your eligibility via the deal lawyers.

When and where is my investment money paid?

The actual transaction of wiring investment money does not occur on CapitalPitch. This occurs offline directly between the investor and the startup, with the help of the lawyers.

CapitalPitch is a platform that accelerates startup investment by marketing startup pitches to a growing pool of sophisticated/accredited and professional investors.

How will the startup communicate with me after I invest?

Once an investment raise is complete, we expect each startup to keep their investors regularly updated on the performance of the business. We encourage them to produce regular dashboards and written updates, as well as more formal financial updates.

However, CapitalPitch is not responsible for these updates. We, like you, will expect to receive them as we are investors too via CapitalPitch Ventures.

What is your referral program and can I take part in it?

Our referral program rewards those that introduce investors that invest in a startup via your deal room on our platform. We reward the introducer with 4% on the funds that the investor they referred invests.

The referral program is open to any CapitalPitch member. You can find your referral URL by clicking the Referral menu link.